German liner operator Hapag-Lloyd has hiked its profit outlook by up to 60% for the current financial year.
Group Ebitda for the full year is forecast in the range of €3.2bn to €4.2bn ($3.5bn to $4.6bn), up from previous estimates of €2bn to €3bn ($2.2bn to $3.3bn).
Group Ebit is in the range of €1.2 to €2.2bn, against the previous €0 to €1bn.
“Because recent strong demand and increased short-term freight rates have exceeded expectations, earnings momentum for the second half of the year is likely to be above previous expectations,” the company said in a statement.
The Hamburg-based company also published preliminary earnings figures for the first half of 2024.
Group Ebitda was €1.8bn in the first six months, down from €3.5bn in the same period last year.
Group Ebit was €8m, down from €2.6bn in the first half of 2023.
The final business figures for the first half of 2024 will be published on 14 August.
“Against the backdrop of very volatile freight rates and major geopolitical challenges, the forecast is subject to a high degree of uncertainty,” the company noted.
In line
The upgrade is in line with analysts’ expectations of higher earnings for leading liner companies.
US investment bank Jefferies had been predicting triple-digit increases in earnings for Hapag-Lloyd and two other big liner companies under its coverage for full-year 2024.
For example, Jefferies’ new Ebitda figure for Maersk is $9bn, matching the top end of the Danish company’s guidance.
Jefferies’ €4bn projection for Hapag-Lloyd tops the company’s previous high estimate of €3bn, and its $2.1bn figure for Zim exceeds the Idan Ofer-backed company’s top guidance of $1.55bn.
Much of the optimism is built on the unexpected benefits of Red Sea disruptions caused by terror attacks on shipping by Houthi militants, and doubts that there will be a quick cessation of those assaults.
Creeping congestion is another potential freight rate catalyst, Jefferies maintains.
This has mainly manifested in Singapore, as liners have reshuffled routes to incorporate a more “hub-based” approach in the face of Red Sea disruption.
